Oil companies underestimating the global market for electric vehicles could be caught unaware by weakened demand for petrol within a decade, analysts said Wednesday.

Falling costs of electric cars and renewable technology may halt growth in oil demand from as early as 2020, they argued in a report.

The current boom in electric vehicles is on track to displace two million barrels of oil per day by 2025, they calculated.

A similar drop in demand preceded the collapse of oil prices in 2014.

By 2035, that figure could quintuple, with electric cars accounting for a third of the road transport market, said the report, jointly issued by financial think tank Carbon Tracker and the Grantham Institute, both in London.

The power and road transport sectors account for about half of fossil fuel consumption, so growth in solar energy and electric vehicles can have a major impact on demand.

“Electric vehicles and solar power are game-changers that the fossil fuel industry consistently underestimates,” said Luke Sussams, a senior analyst at Carbon Tracker.

“Very few companies or institutions in the energy industry are really considering the upside if the technology explodes and grows exponentially,” he told AFP.

Oil and gas giant BP, for example, predicted last week that oil demand from cars would continue to rise well into the mid-2030s.

In 2035, electric vehicles will only make up six percent of the global car fleet, it said in its 2017 Energy Outlook.

Other fossil fuel companies have made similarly rosy forecasts for oil demand.

Non-industry analysts are split on how quickly electric vehicles will displace those powered by internal combustion engines.

The 29-nation International Energy Agency (IEA), formed after the 1973 oil crisis, sees relatively modest growth, resulting in an eight percent market share — about 150 million vehicles — by 2040, and only 1.3 million barrels of oil displaced per day.